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I believe from another thread it is not his primary residence. The majority of the costs you've listed are fictional or perhaps limited to certain areas of the country that are not in SC. As far as taxes, they'll be covered by the tenants rent.
Oh. If it isn't the primary residence than I would DEFINITELY TAKE THE MONEY. Unless you had a tenant that would sign a ten year lease and the annual rent was going to be $50k and the tenant agreed to pay for taxes and maintenance as well, there is no way that your net profit from a rental would exceed your gain from investing the money.
Having it invested you have none of the headaches of being a landlord or the costs associated with taxes and upkeep not to mention risks of losing the tenant. Plus your money is LIQUID. You can switch out of investments sell shares of stock etc in moments not months or years like is required to sell real estate. You also don't have to pay huge commissions to get out of the stock market or switch from one stock to another like you do with real estate. The one good thing about real estate is that you can LIVE IN your "investment" . But if you aren't going to do that, I think it is pretty apparent, the risks of having that much cash tied up in a rental property outweigh the rewards. PLUS you can DIVERSIFY in the stock market by taking the money and spreading it around in different types of investments to reduce your risk if a certain investment doesn't work out. You can also set STOP-LOSS points so that if the stock price falls to a certain level your position is sold and you minimize your loss. You don't have anything CLOSE to THAT kind of protection with real estate! To me it would be an easy choice.
Is the cost basis (near) zero? Has she depreciated every last dime out of it?
Yes and Yes.
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PLUS you can DIVERSIFY in the stock market by taking the money and spreading it around in different types of investments to reduce your risk if a certain investment doesn't work out. You can also set STOP-LOSS points so that if the stock price falls to a certain level your position is sold and you minimize your loss. You don't have anything CLOSE to THAT kind of protection with real estate! To me it would be an easy choice.
Well, since she needs the money immediately for her care (5k/mo) the money will have to go into CD's, lousy as the return is at present, because she will go through that 400k in roughly 6.6 years at today's costs.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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You might consider a 1031 exchange for her then, buy a replacement property. But the downside is that eventually YOU will be holding the bag for a capital gain.
You might consider a 1031 exchange for her then, buy a replacement property. But the downside is that eventually YOU will be holding the bag for a capital gain.
Yes, and she wants out of the real estate merry-go-round. Who wouldn't at 90!!!
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